CA Foundation P4 · Chapter 1 · Question 5 of 15
The central problem 'how to produce' relates mainly to:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) The choice of technique, such as labour-intensive or capital-intensive methods
Explanation
'How to produce' is about selecting the technique of production, i.e., the combination of factors used. Choosing between consumer and capital goods is 'what to produce', distribution of output is 'for whom to produce', and full employment of resources is a separate problem of efficient use and growth.
More Nature and Scope of Business Economics MCQs
- Q7In a capitalist economy, the allocation of resources is primarily guided by:
- Q8Which of the following is NOT a feature of a socialist economy?
- Q9Which of the following is commonly cited as a major demerit of a capitalist economy?
- Q10Mr. Rao runs a business in his own building, which could otherwise be rented out for Rs. 2,40,000 a year. He has invested Rs. 10,00,000 of…
- Q11Economics defined as 'the science which studies human behaviour as a relationship between ends and scarce means which have alternative…